Financially teetering Lon Morris College is exploring merger with or sale to another school.
The two-year, United Methodist-affiliated college in Jacksonville, Texas, furloughed nearly all of its employees last month, after failing to meet three straight payrolls.
It also suspended summer classes, and brought in Bridgepoint Consulting of Austin, Texas, to consider financial restructuring options.
Based on Bridgepoint’s assessment, Lon Morris trustees have concluded, according to a press release issued June 20, that “the college’s mission would be best served under the current circumstances by entering into a transaction or agreement with another educational institution.”
Dawn Ragan of Bridgepoint, who is serving as chief restructuring officer for Lon Morris, said in the same release: “Discussions with multiple entities are ongoing, and an initial agreement is expected this summer.”
Asked if merger or sale is a possibility, she said in an email: “All options are on the table.”
Ms. Ragan said in the release that a modified academic program, designed to satisfy the school’s accrediting agency, is being developed for the coming academic year.
“Athletic programs are expected to be eliminated,” she said.
Lon Morris College was founded in 1854, and is the oldest private two-year college in Texas. Many UM pastors in East Texas and beyond began college there.
But the school has run large deficits in recent years, and last year received a warning from the Southern Association of Colleges and Schools’ Commission on Colleges for failure to meet financial stability standards.
The school’s president, Miles McCall, resigned last month in the same tumultuous stretch that saw nearly all employees furloughed.
In 2007, the Texas Conference guaranteed a $1 million loan to Lon Morris from the Heartspring Methodist Foundation. That loan remains outstanding, conference officials said recently. Lon Morris also has a $250,000 loan from the UMC’s General Board of Higher Education and Ministry.
Lon Morris has faced increased competition for students, including from lower-cost public community colleges. In recent years, Lon Morris added academic programs and re-started a football team – factors which helped enrollment grow from under 400 to more than 900.
But the changes occurred as the recession set in, and the school struggled to pay for the infrastructure necessary for bigger enrollment.
Congregations in the Texas Conference have recently raised about $100,000 to help Lon Morris cover payroll, and a special offering at the conference’s annual meeting raised $9,000 for “individual assistance,” said conference treasurer Elijah A. Stansell Jr.
Here’s the press release issued:
LON MORRIS COLLEGE WEIGHS RESTRUCTURING OPTIONS
Lon Morris College is an East Texas institution with a mission to educate students so they can better serve their community and themselves. The College has experienced negative cash flow in recent years and overextended itself in an attempt to increase its athletic programs. Debts have mounted, causing the college to employ reorganization professionals with Bridgepoint Consulting, and appoint a Chief Restructuring Officer, who conducted an assessment of the school.
The Board of Trustees of Lon Morris College and their advisors considered the Bridgepoint assessment, and have determined the College’s mission would be best served under the current circumstances by entering into a transaction or agreement with another educational institution. Dawn Ragan, the Chief Restructuring Officer for Lon Morris, said ” Discussions with multiple entities are ongoing, and an initial agreement is expected this summer. A modified academic program that will continue compliance with the SACS accreditation policies is currently being developed for the upcoming academic year. Athletic programs are expected to be eliminated. Students will be notified of applicable options available to them. The College is continuing to work on its financial restructuring efforts, and continues to receive strong support from its faculty and employees, the community, alumni, the Texas Annual Conference of the Methodist Church, and its creditors. We are hopeful that the community and future students will benefit from our efforts to achieve the best outcome for Lon Morris, but recognize that near-term disruptions are inconvenient and inevitable.”